China's Warning to Big Tech: You're Not Bulletproof
A revised anti-monopoly law will remind local internet companies who holds the real power.
There’s room for only one monopoly.
Photographer: Eric Lafforgue/Art in All of Us/Corbis/Getty
Antitrust is a relatively new concept in China and has been used most notably against foreign companies. Now, a draft update to China’s existing law puts local internet giants firmly in regulators’ sights. That should keep even the most ambitious executives from getting too big-headed as President Xi Jinping keeps power where it belongs — with the ruling Communist Party.
China’s first antitrust law was passed in 2007, a decade after the U.S. sued Microsoft Corp. over its then-dominant web browser and operating system in what remains one of the largest such cases in history. In 2009, local regulators blocked the Coca-Cola Co.’s $2.3 billion purchase of China Huiyuan Juice Group Ltd. Six years later, U.S. chip designer Qualcomm Inc. narrowly escaped being labeled a monopolist in the market for smartphone chips. It was fined $975 million and forced to lower the royalties it charged handset makers.